The state wants federal housing benefits extended another year for victims of the 2005 hurricanes, citing a lack of affordable housing in the New Orleans area.

The Bush administration this month denied a request to extend the disaster housing assistance through 2011, saying Congress had approved $85 million for rental assistance for families that otherwise would have been displaced when the program ends March 1 and that the state had received additional federal aid to help build more affordable housing in the region.

The denial letter from the Federal Emergency Management Agency and U.S. Department of Housing and Urban Development noted that about $500 million had been spent so far helping families in the disaster housing program, including with case management meant to assess families' needs and gauge their progress toward self-sufficiency.

Louisiana's hurricane recovery chief, Paul Rainwater, in letters this week to the two departments now part of the Obama administration, scaled back his request to a one-year extension. He said the voucher program, for which Congress appropriated the $85 million, would still leave about 7,000 families in need after disaster benefits are scheduled to end.

Fair-market rent in the New Orleans area is 69 percent higher than before Katrina, putting housing out of reach for the "average renter" in the region, he said.

FEMA had been willing to pay up to 120 percent of fair-market rent -- or $1,188 for a two-bedroom apartment in New Orleans -- under the program. There are concerns, particularly among housing advocates, that many families won't be able to afford that on their own and that ending the program will lead to more homelessness. FEMA maintains it has tried to match as closely as possible families with places in their price range.

"You don't want to put people in situations where it's going to cause a hardship down the road," FEMA spokesman Andrew Thomas said Thursday.

The state's revamping rules of the program to help small-scale landlords more quickly fix rental units and get them on the market. The program, which had been reimbursement-based, had been criticized for being too slow and not making a meaningful dent in the region's need for affordable rentals.

Rainwater said another year would allow for more time to get affordable units online.